NPV & IRR Calculator (Net Present Value, Internal Rate of Return)
Evaluate investments and projects with net present value and internal rate of return.
What this calculates
NPV discounts future cash flows to today's dollars using a required rate (your cost of capital). NPV > 0 means the project beats your hurdle. IRR is the discount rate that makes NPV = 0 — the project's implied return. Together they're the core tools for capital budgeting.
Formula & how it works
NPV = Σ CF_t / (1+r)^t, t = 0..n. IRR = r where NPV(r) = 0, found by bisection. Enter cash flows comma-separated, year 0 is usually a negative (the investment).
Worked example
Cash flows: −10000, 3000, 4000, 4000, 3000. Discount 10%. NPV = $1,069 (positive — accept). IRR = 14.5%.
Frequently asked questions
What discount rate?
Your weighted average cost of capital (WACC), or your minimum acceptable return for the risk level.
IRR pitfalls?
Misleading when cash flow signs change multiple times (multiple IRRs) or for projects of very different scale (use NPV instead).
Year 0 negative?
Yes — the upfront investment. It's not discounted because t=0 means today.
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